China's trade surplus widened to a three-year high and exports surged by a third in October as more foreign manufacturers moved to the nation, drawn by lower labor costs and falling trade barriers.
Exports rose 32 percent to US$30 billion last month, giving the country a trade surplus of US$4.75 billion, said the official China Securities Journal, citing customs figures. Imports grew 33 percent to US$25.2 billion.
Rising exports helped China's economy grow 8.1 percent in the third quarter, the fastest rate of any major world economy. China and its trading partners have begun dismantling restrictions on trade and investment since the country joined the WTO last December.
"China's entry into the WTO offers it reduced entry barriers" to industrialized countries, said Ma Jun, an economist at Deutsche Bank AG in Hong Kong. "There is a relocation of export orders to China."
Moves in the currency markets are also helping China grow its exports. The US dollar's 13 percent decline against the euro and 10 percent decline against the yen in the past seven months has made Chinese exports to Europe and Japan cheaper, because the Chinese yuan is pegged to the dollar, Ma said.
Investment from overseas is helping to ease China's unemployment problem. Foreign direct investment rose 22 percent to US$41 billion in the first nine months this year, and the government predicts it may reach US$55 billion for the full year.
Companies such as mobile-phone makers Motorola Inc. and Nokia Oyj are expanding their manufacturing operations in China, and General Motors Corp said last month it plans to start exporting engines from the country.
"So many multinational companies are already established in China," said Joan Zheng, an economist at JP Morgan Chase & Co.
in Hong Kong. "They tend to outsource to limit their costs and are going to their own subsidiaries" in China.
For the first 10 months of the year, exports increased 21 percent to US$263 billion, while imports grew 19 percent to US$238 billion, giving a trade surplus of US$25 billion, the report said.
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